Appendix B
Appendix B is an explanation of adjustments made to Base Year 1998 and Fiscal Year 1999.
Base Year 1998 has been adjusted to reflect the consolidation of Special Delivery Messengers in Cost Segment 9 with Clerks/Mailhandlers in Cost Segment 3 beginning in Fiscal Year 1999[1]. The consolidation of operations into the new structure is a transition, and the functions performed by Special Delivery Messengers remain intact; thus, for purpose of this testimony Special Delivery Messengers are simply transferred from Cost Segment 9 into Cost Segment 3. This is accomplished by transferring the Special Delivery Messenger components from Cost Segment 9 to Cost Segment 3 and rolling these costs forward using the same manner as in the past.
Two other changes have also been identified in Fiscal Year 1999: a) migration of Standard A Single Piece to First-Class and Priority Mail as of January 10, 1999, and b) a reporting change in International mail volume. To accommodate implementation of these additional changes in Fiscal Year 1999, an additional rollforward after Fiscal Year 1999 Before Workyear Mix is required (Adjusted Fiscal Year 1999, WP-C).
Standard A Single Piece costs by component are obtained from the A report of the Fiscal Year 1999 Before Workyear Mix (WP-B). Then, using mail volume as a proxy, single-piece cost for each component is distributed to First-Class and Priority Mail (Figure 1).
To remove the impact of a reporting change on international mail volume in Fiscal Year 1999, an additional adjustment is made using the rollforward mail volume adjustment factor (VBL2). Using FY99 RPW data, a percent change is calculated by dividing -67.798 million pieces of additional international mail to total international mail volume of 963.425 million pieces in FY99. This ratio is then applied to international mail volume in RAT2FACT file of WP-C in order to remove the effect of overstating International mail volume due to this reporting change.
[1] Since this